Insurance companies seek rate hike for local homeowners

Published: Wednesday, January 8, 2014 at 4:30 a.m.

Last Modified: Tuesday, January 7, 2014 at 6:17 p.m.

On behalf of insurance companies, the N.C. Rate Bureau filed a request with the state this month to raise rates for homeowners in Transylvania County by 28.3 percent and by 21.1 percent in Henderson and Polk counties.

Statewide, the bureau wants to raise homeowners' insurance rates by an average of 25.3 percent, effective Aug. 1.

Ray Evans, general manager of the N.C. Rate Bureau, said the proposed jump is so large because insurance companies haven't been allowed to do incremental, yearly adjustments to match rising claims and damages in many state “territories.”

“We've only had five changes approved over the last 14 years,” said Evans. “What we're trying to do is get on a yearly schedule and this is the first time we've had no litigation or other outstanding things... We think the rate level is pretty much inadequate across the board and sooner or later, we need to get caught up.”

The public has until Jan. 31 to offer comment on the proposed rate hike, which must be agreed to by the N.C. Department of Insurance. The bureau is a nonprofit rating institution representing insurance companies, while the NCDOI represents the interest of consumers.

Under state law, the rate bureau can propose alterations in insurance rates at any time, said NCDOI Spokeswoman Kerry Hall. But N.C. Insurance Commissioner Wayne Goodwin's reaction to this month's proposal from the bureau was that it's too much, too soon.

“New homeowners insurance rates went into effect in July 2013,” said Goodwin, a Democrat in his second term. “I am appalled that the insurance companies would request another increase just six months later. I believe (they) should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter. I will not entertain any settlement negotiations.”

Hall said there are three possible outcomes to a proposed rate hike from the bureau: the insurance commissioner can agree and approve an effective date; experts from both sides can reach a mutual settlement; or the commissioner can issue a ruling after hearing testimony during a formal hearing, which can be appealed by insurance companies in court.

In recent history, Hall said, a settlement between insurance and consumer interests has been reached. In 2012, the rate bureau filed for a 17.7 percent statewide increase, which was eventually settled at 7 percent on average.

Evans said while some areas of coastal North Carolina were adjusted more heavily because of high potential for hurricanes, most counties in Western North Carolina saw “virtually no change” in their homeowner rates. But newer actuarial data show premiums in Transylvania, Henderson and Polk are not keeping pace with claims and damages, he said.

He said Transylvania's proposed rate hike is higher than Henderson's and Polk's because fire- and weather-related losses were generally greater there. Also, Evans said the potential for loss due to fire is higher in Transylvania “because of limited fire protection and limited water supplies.”

Goodwin urged North Carolina homeowners “to take advantage of the public comment period and let their insurance companies know what they think about the notion of another homeowners insurance rate increase.”

A public comment session will be held from 9:30 a.m. to 4 p.m. on Friday, Jan. 24 in the Jim Long Hearing Room of the Dobbs Building, 430 N. Salisbury Street in Raleigh. Written comments can be mailed to NCDOI, attn: Bob Mack, Property & Casualty Division, 201 Mail Service Center, Raleigh, NC 27699-1201 or emailed to 2014homeowners@ncdoi.gov.

<p>On behalf of insurance companies, the N.C. Rate Bureau filed a request with the state this month to raise rates for homeowners in Transylvania County by 28.3 percent and by 21.1 percent in Henderson and Polk counties. </p><p>Statewide, the bureau wants to raise homeowners' insurance rates by an average of 25.3 percent, effective Aug. 1. </p><p>Ray Evans, general manager of the N.C. Rate Bureau, said the proposed jump is so large because insurance companies haven't been allowed to do incremental, yearly adjustments to match rising claims and damages in many state “territories.”</p><p>“We've only had five changes approved over the last 14 years,” said Evans. “What we're trying to do is get on a yearly schedule and this is the first time we've had no litigation or other outstanding things... We think the rate level is pretty much inadequate across the board and sooner or later, we need to get caught up.”</p><p>The public has until Jan. 31 to offer comment on the proposed rate hike, which must be agreed to by the N.C. Department of Insurance. The bureau is a nonprofit rating institution representing insurance companies, while the NCDOI represents the interest of consumers.</p><p>Under state law, the rate bureau can propose alterations in insurance rates at any time, said NCDOI Spokeswoman Kerry Hall. But N.C. Insurance Commissioner Wayne Goodwin's reaction to this month's proposal from the bureau was that it's too much, too soon.</p><p>“New homeowners insurance rates went into effect in July 2013,” said Goodwin, a Democrat in his second term. “I am appalled that the insurance companies would request another increase just six months later. I believe (they) should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter. I will not entertain any settlement negotiations.”</p><p>Hall said there are three possible outcomes to a proposed rate hike from the bureau: the insurance commissioner can agree and approve an effective date; experts from both sides can reach a mutual settlement; or the commissioner can issue a ruling after hearing testimony during a formal hearing, which can be appealed by insurance companies in court.</p><p>In recent history, Hall said, a settlement between insurance and consumer interests has been reached. In 2012, the rate bureau filed for a 17.7 percent statewide increase, which was eventually settled at 7 percent on average. </p><p>Evans said while some areas of coastal North Carolina were adjusted more heavily because of high potential for hurricanes, most counties in Western North Carolina saw “virtually no change” in their homeowner rates. But newer actuarial data show premiums in Transylvania, Henderson and Polk are not keeping pace with claims and damages, he said.</p><p>He said Transylvania's proposed rate hike is higher than Henderson's and Polk's because fire- and weather-related losses were generally greater there. Also, Evans said the potential for loss due to fire is higher in Transylvania “because of limited fire protection and limited water supplies.”</p><p>Goodwin urged North Carolina homeowners “to take advantage of the public comment period and let their insurance companies know what they think about the notion of another homeowners insurance rate increase.”</p><p>A public comment session will be held from 9:30 a.m. to 4 p.m. on Friday, Jan. 24 in the Jim Long Hearing Room of the Dobbs Building, 430 N. Salisbury Street in Raleigh. Written comments can be mailed to NCDOI, attn: Bob Mack, Property & Casualty Division, 201 Mail Service Center, Raleigh, NC 27699-1201 or emailed to 2014homeowners@ncdoi.gov.</p>